The classification of risks facing society in connection with the creation and spread of virtual assets: institutional and scientific approaches

Abstract

The article suggests that the emergence and proliferation of virtual assets has led to an increase in a number of negative events (risks) that society, States and investors might face. However, despite significant developments in identifying these risks, there is still no generalized classification of them. Given this, the purpose of the article is to analyze and classify the risks faced by society, States and investors in connection with the emergence and proliferation of virtual assets.

The author proposes to classify the risks into six groups based on the study: economic, investment, criminological, technological, subjective, and environmental risks. Within each of the proposed classification groups, the author identifies the relevant risks. For example, the economic risks include the following: the possibility of affecting the foundations of financial stability and security of the state, inflation (possible impact on the monetary policy of the state due to unjustified and uncontrolled increase in the money supply), the possibility of creating pyramid schemes, the possibility of circumventing currency legislation (in particular, currency restrictions on the withdrawal of currency abroad).

As to the subjective risks, the author identifies the following: the possibility of unfair behavior of entities providing services in the field of turnover of such assets, the possibility of losing a crypto wallet password and/or a secret personal PIN code by its owner, the possibility of an erroneous transaction during a transfer from one crypto wallet to another, the possibility of carrying out settlement operations and entering into smart contracts by persons under the appropriate age or with limited legal capacity, and the inability of some non-professional users to use virtual assets.

It is emphasized that a comprehensive study of the risks that may arise in connection with the emergence and proliferation of virtual assets will form the basis for further development of legal support for their operation and implementation in all spheres of public life.